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Just Ask!

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At CEG Worldwide we make extensive use of commissioned in-depth research. Sometimes, as we dig through the data, we find contrasts and anomalies that lead to a kind of “Aha!” moment, the sort of thing that surprises us at the same time that it makes clear how most advisors can easily boost their businesses.

One such “Aha!” moment concerns the best way to grow assets under management. In 2007, we undertook an extensive study of 2,094 financial advisors across all three channels — registered independent advisors (19.8 percent of those studied), independent broker-dealer representatives (27.5 percent) and brokers employed by wirehouses (52.7 percent). What we found, first of all, is that 87.6 percent of advisors surveyed were very concerned about significantly growing their assets. (The only concern that ranked higher was finding wealthier clients.)

Since there are really only two ways to increase assets — first, to acquire new ideal clients, and second, to capture additional assets from existing clients — we expected to find advisors acting on their concerns and employing strategies to increase assets under management. Since we know that it’s far easier to get additional assets from existing clients than it is to find additional ideal clients, we might expect that most advisors would be regularly asking their existing clients for additional assets. Instead, we found that only 10.9 percent of surveyed advisors regularly ask their existing clients for additional assets to manage.

Why isn’t asking for additional assets from existing clients at the forefront of every advisor’s mind? This should be one of the basic strategies undertaken by all advisors to grow their businesses, yet so very few do this. What can possibly explain this?

What we’ve found is that many advisors believe that if they do a great job for their clients, then their clients will automatically bring them additional assets. Just as it isn’t true that doing a great job will automatically generate referrals to new ideal clients, it simply isn’t true that doing a great job will automatically result in existing clients offering up additional assets to manage. Waiting for such “automatic offerings” amounts to a self-deluding business plan, one that simply isn’t proven by experience.

When and WhyRecently, we have been experiencing turbulent market conditions, and you might think that this is not a good time to ask for additional assets. But paradoxically, times such as these are perfect for capturing additional assets from existing clients.

Clients today are uneasy, and in many cases they have not even heard from their other financial advisors during these dark days. Advisors kid themselves into thinking that their clients are well-prepared for times such as these, but the truth is that no client is ever emotionally prepared for volatile markets. Clients need information, assurance and handholding, but far too few advisors regularly provide such comfort. You therefore have an excellent opportunity — right now — to make in-depth contact with your clients and provide the kind of comprehensive service that builds long-term trust and separates you from other advisors.

Another thing that advisors regularly kid themselves about is the percentage of their clients’ overall assets that they manage. Our research consistently shows that while most advisors think they have all of their clients’ assets, very few in fact do. So even if you think you probably have all of an existing client’s assets, you should still regularly follow the following five-step process.

Five Steps to Additional AssetsThe first step is to set expectations with your clients. You set expectations by reminding your clients in every meeting that you are keenly interested in their overall well-being, which includes taking into account the way other advisors are managing their assets. Many clients define diversification in terms of having multiple advisors manage their portfolio. But in order to avoid overlap, someone has to be at the helm, orchestrating the entire portfolio. Without such orchestration, things can really go awry in a portfolio, with over-concentration or conflicting strategies actually increasing the client’s overall risk.

The second step is to review the overall relationship with your client and offer to go to the next level. Talk about what you already do for the client — how you already help him or her — and offer to be the overall portfolio coordinator, the person at the helm. Say, “We’d like to give you a no-obligation total portfolio review to look at what’s happening across all of your assets. We want to make sure that you’re in fact not increasing your risk because of over-concentration or conflicting advice.” Few clients will turn down a free, comprehensive, total portfolio check-up.

The third step is to identify asset transfer opportunities as part of this financial check-up or X-ray. The fourth step then goes one of two ways, depending upon what you’ve found in your review of the client’s portfolio.

If you’ve found that everything in your client’s portfolio is in order, then you’ll want to report back something like, “Things are OK right now, but we’d like to continue to keep an eye on everything, and do quarterly or semi-annual reviews, in case things should get out of balance.” Being straightforward like this will raise your level of professionalism as well as the client’s respect for you; you’ll have provided a service and given honest feedback, and your client will recognize that you’re not just trying to sell something. Then, the next time your client gets an annual bonus, sells an asset, or receives an inheritance, it’s far more likely those assets will come to you given your honest and straightforward approach.

Alternatively, if you’ve found that your client is overexposed or over-concentrated, then identify those areas to the client and suggest that the relevant assets be brought to you to mange. You should, of course, be prepared to lay out your strategy for what you’ll do with those assets if they are brought over to you.

The fifth and final step, regardless of what you’ve found during the portfolio check-up, is to thank your client for their time and their business. It’s always a good idea to let your clients know that you truly appreciate the trust they’ve placed in you.

Critical Success FactorsIdeally, you’ll eventually ask nearly all your clients for additional assets. But given today’s uncertain market conditions, you’ll want to prioritize which clients you ask based on your likelihood of success. Segment your clients by determining which ones are the most highly satisfied with your services and therefore the most predisposed to bring you additional assets. Also prioritize clients for whom you’ve recently performed some great service, as well as clients who have recently come on board and are very happy with you. Another important factor is to identify clients whom you already know have additional assets that you currently aren’t managing. If you only have 20 percent or 30 percent of a satisfied client’s assets, then you definitely want to put that client near the top of your list.

But the most critical success factor of all is to…just ask! If you don’t just ask, then you just won’t get. Especially now, when many clients are feeling stress and anxiety over their investments, and when many of your clients’ other advisors aren’t performing up to expectations, it’s a perfect time to offer an overall portfolio check-up as part of the additional asset capture process.

Importantly, this process is best done in face-to-face regular progress meetings. Yes, your client may have had a rough quarter, but that’s exactly when and why they most need to hear from you. Instead of hiding out, it’s a perfect time to have your own “Aha!” moment as you step into the breach with your clients, reassure them, and then ask for additional assets using the process outlined above. As our coaching clients regularly confirm, asking for additional assets really works, and amounts to a huge win-win: Not only will you increase your business, but you’ll provide your clients with better service and a more satisfying and comprehensive total package.

Patricia J. Abram is a senior managing partner with CEG Worldwide in Florida; see


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